HELP Hydrocarbon Exploration and Licensing Policy

Tamil Research Institution (TRI)
Evolution of Upstream
Indian Oil and Gas Industry
The story of Oil exploration in India began in the dense jungles and swamps
and river-valleys of the north-eastern corner of the country. Lt. R. Wilcox,
Major A. White, Capt. Francis Jenkins, Capt. P.S. Hanny, W. Griffith, W.Licut
Bigge–they all saw at different times petroleum seepages from the banks
of river Dihing. Mr. C.A. Bruce (1828) and Mr. H.B. Medicott (1865) of the
Geological Survey of India also saw oil seepages while prospecting for
coal in upper Assam.
Barely seven years after Edwin L. Drake drilled the world’s first Oil well
in 1859 at Titusville, Pennsylvania, USA, in 1866, Mr. Goodenough of
McKillop, Stewart and Company, Calcutta, drilled a hand-dug well of 102
feet at Nahorpung near Jaipur area of Upper Assam but failed to establish
satisfactory production. In his second attempt on 26 March 1867, Oil was
struck at merely 118 feet (35.97-m) in Asia’s first mechanically drilled well
at Makum near Margherita area of Upper Assam.
However, the first well dug at Digboi field in Assam in September 1889
and completed in November 1890 at depth of 662 feet by Assam Railways
and Trading Company Limited (AR&T Co. Ltd.), registered at London, is
regarded as the first commercially successful Oil discovery (200 gallons
per day). To add color to geological reasoning, legend was created that
during the construction of a railway line by AR&T, in the year 1867, a herd
of logging elephants returned to camp with their feet covered in oil after
a night time excursion to find food and water. This led men to trail to the
salt lick where seepages were prolific. Looking at this, the elated English
owner cried out to his men, “Dig boy, dig”. Probably the name Digboi itself
came from that word.
AR&T subsequently acquired a 77.7 square kilometer petroleum-rights
concession in the Makum area of Assam, and by 1893 had drilled 10
wells at Digboi producing 757.08 liters/day. AR&T established Assam
Oil Company (AOC) in 1899 with a capital of £310,000 to take over the
petroleum interests of AR&T, including the Digboi and Makum concessions
and set up a small refinery at Margherita (Upper Assam) with a capacity
of 500 bopd to refine the Digboi-Oil. Thereafter, systematic drilling began
in 1891 and few years later in 1901, Asia’s first Oil refinery was set up at
Digboi. It is still functional and the world’s oldest operating refinery.
Failure to utilize Geological reasoning, promiscuous wild catting,
misguided investment and nonchalance of the management towards
technical support led to compounding of errors by AOC which made
the company technically and financially
impotent. Later on UK based Burma Oil
Company (BOC) arrived in 1911 in Upper
Assam (Surma Valley) and in 1915, after
acquiring Oil interest from Budderpore
Oil Co. Ltd. (formed by a syndicate of
Budderpore tea garden during 1911-
13) began testing option in the Badarpur
structure in the Surma valley (Upper
Assam). Gradually by 1921, in a phase-wise
manner, BOC acquired petroleum interests
of AOC.
'Torsion balance' which was successfully
adapted for geophysical surveys of Oil was
used at Bordubi (Assam) by a geophysical
team in 1925. The Indian Co. “TATA
Engineering Co.” has also drilled several
wells in Jagatia, Gujarat and produced
small amount of gas in 1930s. In 1937, BOC
jointly with British Petroleum (then Anglo
Iranian Oil Co.) and Shell proposed to Govt.
of India to carry out a geophysical survey
of the important plain areas of India. The
proposal was accepted and a new form of
grant known as geophysical license was
issued by Assam Government. In Assam,
successful seismic survey was carried out
in Nahorkatiya during 1937-39, triggering
new enthusiasm in Oil search and it became
forerunner of discoveries in Assam basin
and others also. The successful outcome
of well NHK-1 in 1937 was vindication for
geophysical method in Oil exploration.
The world knew importance of Oil and after
Independence, Indian leaders realized its
utility for rapid industrialization and security
of nation. The company rules which were
earlier framed to satiate the raw material
need of British Empire were re-framed.
14 Evolution of Upstream Indian Oil and Gas Industry
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